February 7, 2014
To whom it may concern,
My name is Kit Hayes and I am a Campaign Director at Peers.org. Peers is a member-driven organization that supports the sharing economy movement. We believe that by sharing what we already have — like cars, homes, skills and time — everyone benefits in the process.
The sharing economy is helping us pay the bills, work flexible hours, meet new people or spend more time with our families. We think it’s how the 21st century economy should work, so we’re coming together to grow, mainstream and protect the sharing economy.
Our members are passionate about equity crowdfunding and 77 of our members are asking the SEC to take the following public comment into consideration as Title III is finalized:
- Lessen the paperwork burden for crowdfunding. Experts say it could be very cost prohibitive to get the paperwork you need to even ask anyone for money. We should make it easier, faster and cheaper to get started.
- Reduce the liability risk for entrepreneurs: The current rules call for strict liability, which means that if an entrepreneur makes even a tiny mistake on any of their documents, they could be sued. Yikes! Mistakes happen.
- Get rid of the on-going audit: The current rules call for regular audits if you get funded. While we need to incorporate this on some level to protect investors, it’s expensive and time consuming for startups to perform at this frequency.
- Make it rain: The current law lets entrepreneurs raise just $1M per year by crowdfunding. The same day that bar was set, someone on Kickstarter raised $2M. The SEC can’t change that, but they could tell their friends in Congress that they need to start rethinking this sooner rather than later.
Why is this important?
“Equity crowdfunding” is the sharing economy’s best tool for raising money. It makes it possible for anyone to invest in anyone’s business. It has the potential to democratize our economy, making it easy for anyone, no matter what school they went to or what degree they have, to raise money if they have a great idea.
Some of rules the SEC Is proposing will limit crowdfunding’s potential and scale.
If it takes off, investment crowdfunding could mean the difference between $30bn and $300bn in startup money. Almost 98% of people are turned down when they try to get money from venture capitalists right now.
Investment crowdfunding will allow an influx of new ideas and fresh thinking to hit the market. Small business make up 65% of our jobs, so we need all the ideas we can get to keep the economy moving along.
Let’s make people-powered startup funding work for all of us.
Thank you for your attention and for the ability to be a part of this process.